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Kinder Morgan Affiliates Award EPC Contract for Elba Facility

Kinder Morgan Inc. KMI announced that its subsidiaries, Elba Liquefaction Company, L.L.C. and Southern LNG Company, L.L.C., have awarded a contract to IHI E&C for the engineering, procurement, construction, commissioning and start up of its natural gas liquefaction project at Elba Island, near Savannah, GA.

The Elba Liquefaction Project, valued at about $2 billion, will comprise 10 Movable Modular Liquefaction System (MMLS) trains that employ the proprietary technology of Royal Dutch Shell plc RDS.A. The new units will be attached to Kinder Morgan’s existing re-gasification terminal at Elba Island. The existing terminal will be remodeled to obtain liquefied natural gas (LNG) from the new liquefaction facilities. The existing Elba facilities will be revamped with compression for vapor handling as well as new pumps for loading LNG on vessels for export.

Royal Dutch Shell will purchase the entire liquefaction capacity and ship-loading services developed by Elba Liquefaction Project. On completion, the project will have a capability to process and liquefy a total of about 2.5 million tons per annum of LNG.

A schedule developed by the companies reveals the modular aspect of the new liquefaction facility. IHI E&C’s office in Houston has begun the initial engineering, procurement and construction planning though the Federal Energy Regulatory Commission (FERC) is yet to approve the project. Apart from project modularization, IHI E&C will be responsible for major instrumentation and electrical engineering, logistics and interface management, procurement, supply-chain expertise, and large scale construction.

The execution strategy involves local subcontracting for site services, local labor charges, employment of local vendors for consumables, and cooperating with local authorities on traffic and other community interests. Dedicated quality management will cover every facet of the project, from EPC to commissioning and start-up.

The project will also demonstrate IHI E&C’s business model during the execution phase, especially value to the customer, collaboration and performance.

Currently, Kinder Morgan carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are ReneSola Ltd. SOL and Enviva Partners, LP EVA. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
 
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